The truth about the great property swindle

  • 2008-09-24
  • By Matt Withers

TALLINN - Lee Williams, the embattled co-founder of the scandalized property investment company Churchill OU, has professed his innocence in an exclusive interview with The Baltic Times.
In the wake of fraud allegations in the Estonian press, including TBT, Williams angrily claims to have been sold to the media as a scapegoat by those truly responsible for the Parnu property swindle.

The British businessman was accused of running off with the deposits of hundreds of U.K. clients, an amount upwards of 30 million kroons (1.9 million euros). He would supposedly entice prospective buyers with tours of undeveloped sites and not follow through with construction after the deposits were paid.
Williams sharply dismisses this claim with the hard fact that he never handled the money.
"Churchill OU has not received any payments from any clients. We haven't taken any money directly from clients. I kept a good set of accounts in Estonia, and they will show that no client money reached the company," said Williams.

Williams said Churchill OU, the company he ran, was only involved with the management of developments in Estonia; it was his then-partner, Karl Goldthorpe, who was making the sales in the U.K. under the company name Churchill Property Overseas.
Sandra Banford, whose investment group is still owed 117,150 pounds (148,775 euros or 2,324,851 kroons) by Churchill, corroborates Williams' story, telling TBT "Everything Lee Williams has stated to you I believe to be true. Karl Goldthorpe is the main man."

In the original business plan, Goldthorpe's company in the U.K. would make the sales; Williams would then handle the management and development of the projects in Parnu.
"My job was to manage and find the properties in Estonia. The client paid in the U.K., and then if anyone came over we'd show them the property," said Williams.
Things all went wrong when Gellerts, the company contracted for the Churchill Beach Resort project, was found to be doing shoddy construction work.

"It was a complete abomination using substandard materials. I stopped the build with them and took legal proceedings to get the deposits back," said Williams.
Gellerts had received 1.4 million kroons (89, 476 euros) in deposits, and Churchill OU took them to court in order to retrieve the client money. Churchill lost the case because contracts were in the individual clients' names, meaning they would have to go to court personally.

Although the initial build was frozen by court proceedings, Goldthorpe continued to buy new land and began making sales without getting planning permission. Williams said that this was entirely against his wishes, and that Goldthorpe's failure to secure planning permission and his lack of intention to build brought about the breakup of their partnership.

Additional funding from the U.K. was needed to finish the detailed planning at the sites, but it never came through, and planning was frozen. Hundreds of clients were left enraged and empty-handed.
Goldthorpe then liquidated Churchill Property Overseas and continued making fraudulent sales through two alias companies, Churchill Property Investments and Churchill Innovative Solutions.
William claims that Goldthorpe had deliberately tarnished his reputation to shift the blame. He remains bitter about the situation, which has damaged his business reputation.

"I've been branded a rogue trader. It's been really damaging and without any real evidence," he said.
Sources indicate that Karl Goldthorpe has been arrested in the Isle of Wight in England, and officials are examining his financial records.